Bakkavör has announced that year-on-year operating profit fell 39 per cent to £18.2m (€22.9m) during the third quarter of 2008, contributing to a 37 per cent drop (to £54.7m, or €68.9m) for the first nine months of the year.
Cash flow from operating activities stood at £28.8m (€35.5m) during the third quarter, an increase of 41 per cent, although overall cash flow for the nine-month period fell 46 per cent to £44.3m (€55.8m).
The group attributed the 'expected' drop in profitability to its withdrawal from a number of ready meal businesses in the second quarter, as well as the 'steep increase' in raw material and utility costs.
A downturn in consumer confidence and unsettled summer weather in the UK were also cited as reasons for the profit loss, CEO ágúst Gudmundsson noted.
'Bakkavör Group is progressing well in very challenging conditions as we continue to focus on our business priorities to mitigate inflationary costs, improve operational efficiencies, increase market share and drive significant cash generation,' said Mr Gudmundsson. 'As such we are making firm groundwork towards our stated intention of returning to profit growth in 2009.'
Loss on the group's 10.9 shareholding in Irish convenience food manufacturerGreencore Group PLC, which Bakkavör relinquished at the beginning of October, amounted to £58.5m (€73.7m) for the first nine months of the year.
'Looking ahead we expect the trading environment to remain tough for the remainder of the year and into 2009,' Mr Gudmundsson said. 'We will continue to focus on our key business priorities in order to drive sales and profit performance and remain confident of our commitment to the fresh produce foods sector.
'Bakkavör Group remains focused on upholding and strenghtening its position in the fresh prepared foods and produce markets, underpinned by its ability to successfully meet changing consumer needs,' he added.
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